Rates Just Hit 4.60%: Should Melbourne Buyers Wait, Fix, or Buy the Dip?

The Reserve Bank has just made the Melbourne property decision harder.

On 29 September 2026, the RBA raised the cash rate by another 0.25 percentage points to 4.60%, effective 30 September — the fourth rate increase of 2026 and the highest cash rate in around 15 years. The RBA said inflation remains elevated and that some of the upside risks it had previously identified are now materialising.

At the same time, Melbourne property prices are falling. Cotality data for August showed Melbourne dwelling values down 1.1% in the month and 4.7% over the year, while selling conditions have become more favourable to buyers.

That leaves buyers facing an uncomfortable question:

Should you buy now while prices are softer, wait for further falls, or hold off until home loan rates become clearer?

There is no universal answer. But there is a better way to make the decision than trying to predict exactly where either interest rates or Melbourne property prices will bottom.

What Does an RBA Cash Rate of 4.60% Actually Mean?

The cash rate is not the mortgage rate you receive from a bank.

But movements in the RBA cash rate strongly influence funding costs and therefore the home loan rates Australian borrowers are offered.

After the September increase, the official cash rate is now:

4.60%

That compares with:

3.60% at the end of 2025 3.85% after February 2026 4.10% after March 4.35% after May and now 4.60%.

The RBA has not promised that this is the peak.

Its September statement said it will continue monitoring inflation and economic conditions and will do what it considers necessary to maintain price stability.

That matters for anyone buying on the assumption that rates must fall soon.

They may.

But your property purchase should still work financially if they do not.

Mortgage Stress Is Already Much Higher Than Earlier This Year

One figure circulating online is that roughly 29% of mortgage holders are at risk of mortgage stress.

That figure is now out of date.

Roy Morgan estimated that 29% were at risk in May 2026. Its latest research, covering the three months to August, puts the figure at 32.3% of owner-occupier mortgage holders, equivalent to about 1.72 million Australians.

That was measured before the latest 4.60% cash-rate increase had flowed through to borrowers.

Roy Morgan also modelled what could happen if the RBA were to increase the cash rate again to 4.85%. Under that scenario, it estimates the proportion of mortgage holders considered at risk could rise to 33.9%, or about 1.8 million people.

Importantly, 4.85% is a scenario, not a confirmed November rate decision.

For a buyer, that distinction is important.

Do not build a purchase around a forecast being right.

Build it around whether you could continue holding the property if the less comfortable scenario occurs.

Should You Buy Now or Wait for Melbourne Property Prices to Drop Further?

Melbourne buyers are currently getting something they have not consistently had in recent years:

negotiating leverage.

Cotality reported Melbourne dwelling values were 4.7% lower over the year to August, while the premium end of Melbourne's house market has corrected substantially more. Upper-quartile Melbourne house values were about 10.5% below their cyclical peak by September.

Listings are also higher, vendor discounting has widened and properties are taking longer to sell nationally.

This does not mean every Melbourne property is suddenly cheap.

A quality family home in a tightly held school-zone street can behave completely differently from a high-supply apartment, development-site townhouse or premium home where the vendor needs to sell.

That is why the question should not simply be:

"Should I buy the Melbourne dip?"

A better question is:

"Is this particular property trading below a reasonable value while I have enough financial capacity to hold it comfortably?"

Forge's guide to negotiating in Melbourne's softer property market explains how days on market, comparable sales, price changes and vendor motivation can be used to assess that opportunity.

The Biggest Mistake Is Trying to Time Two Markets at Once

A buyer who decides to wait is effectively making two forecasts simultaneously.

They are predicting where interest rates will go.

And they are predicting where Melbourne property prices will go.

Those two movements can also work against each other.

Imagine a property is currently worth $900,000 and subsequently falls another 5%.

That sounds attractive.

But if borrowing capacity falls at the same time because mortgage rates rise, the buyer may not actually be in a stronger position.

The opposite can also happen.

If the RBA eventually cuts rates and borrowing capacity improves across thousands of households, some buyers who waited for cheaper finance may find themselves competing against more purchasers.

The point is not that buying now is automatically better.

It is that waiting is also a financial position with its own risks.

Forge has previously examined the broader buy-now-versus-wait decision in Melbourne. The latest rate rise makes stress-testing the numbers even more important.

Fixed vs Variable Home Loan: What Should Buyers Consider in 2026?

Search demand for "fixed vs variable home loan" is substantially stronger than many of the more specific rate-rise phrases currently appearing in forums.

And understandably so.

When rates are rising, fixing can feel like protection.

A fixed-rate loan generally gives you repayment certainty for the fixed period. That can be useful if knowing exactly what you will pay each month matters more to you than benefiting immediately from a future rate reduction.

A variable-rate loan normally moves with your lender's pricing decisions. It may allow you to benefit more quickly if rates fall, but it also exposes you to further repayment increases if rates keep rising.

Neither structure automatically wins.

There are also differences between lenders around offset accounts, additional repayments, redraw facilities, break costs and split-loan arrangements.

For some borrowers, a split structure — fixing part of the debt while keeping part variable — can provide a middle ground.

The relevant question is not simply:

"Where do I think rates are going?"

It is:

"How much repayment uncertainty can my household realistically absorb?"

Buyers should compare loan structures with a licensed mortgage broker or lender based on their own circumstances rather than treating an interest-rate forecast as financial advice.

Stress-Test Your Auction Limit at 4.85%, Not Just Today's Rate

This is particularly important for Melbourne auction buyers.

Winning the auction is not the objective.

Owning the property comfortably after winning it is.

Before setting a bidding limit, calculate repayments not only using your current mortgage quote but also using a higher-rate scenario.

For example, if your borrowing assumptions are based on a mortgage rate around 6%–6.5%, ask what happens if your actual rate increases another 0.25 or 0.50 percentage points.

Then test the effect on:

monthly repayments,

your emergency cash buffer,

childcare and household expenses,

owners corporation fees,

council and water charges,

maintenance,

insurance,

and any planned renovations.

If the maximum auction bid only works under today's best-case finance assumptions, it is probably not a genuine maximum.

Forge's guide to buying smart in Melbourne's softer auction market explains how comparable sales and a predetermined walk-away price can help stop an auction from turning a finance decision into an emotional one.

Where Can Higher Rates Actually Create Buying Opportunities?

Rate rises do not affect every Melbourne submarket equally.

Higher borrowing costs tend to hurt most where buyers were already stretching close to their maximum capacity.

That can create greater negotiating pressure in:

higher-priced discretionary markets,

properties requiring substantial renovation,

homes with unusually high holding costs,

investor-heavy apartment markets,

and listings where sellers need to transact rather than simply test the market.

Meanwhile, more affordable properties can sometimes prove more resilient because they remain accessible to a broader pool of buyers.

Cotality's September analysis shows exactly that pattern. Melbourne's higher-value houses have experienced substantially larger declines than more affordable segments, while units have generally held up better than houses through the current correction.

For investors, price alone is not enough.

A cheaper purchase can become less attractive if owners corporation fees, maintenance and finance costs absorb the rental income.

Conversely, a softer purchase price combined with resilient rental demand may improve the numbers even while borrowing costs remain high.

That analysis needs to happen at suburb, building and property level, not from a Melbourne-wide median.

Don't Let a Cheaper Property Distract You From the Property Itself

A higher-rate environment can make buyers intensely focused on price.

But saving $30,000 on the purchase price is not much of a victory if the property later requires $100,000 of unexpected work.

Review the contract, owners corporation documents where relevant, building condition and future maintenance before committing.

For buyers considering whether a home will remain suitable as their circumstances change, accessibility and adaptability can also be worth assessing before purchase. Providers such as Mobility Access Modifications work with Victorian homeowners on ramps, bathroom modifications and other residential accessibility changes.

The cheapest property is not necessarily the best-value property.

So Should Melbourne Buyers Wait, Fix or Buy the Dip?

Rather than trying to call the exact bottom, separate the decision into three tests.

1. Can You Hold the Property if Rates Rise Again?

Stress-test repayments at a higher interest rate — including a 4.85% cash-rate scenario — and retain a meaningful cash buffer.

If the numbers become uncomfortable quickly, the purchase price may be too high regardless of how attractive the discount looks.

2. Is the Property Actually Cheap?

Compare it against genuinely similar recent sales.

Do not assume a property represents a "dip" simply because the asking price has been reduced.

The vendor may simply have started too high.

3. Are Current Market Conditions Giving You Negotiating Power?

A softer market is most useful when it allows you to buy a property you already want at a better price or on better terms.

It is much less useful if it encourages you to buy a compromised property purely because it appears discounted.

The Bottom Line

The RBA cash rate reaching 4.60% changes the numbers for Melbourne buyers, but it does not automatically answer the buy-versus-wait question.

Melbourne dwelling values were already 4.7% lower year-on-year to August, premium housing has fallen considerably further from its peak, and weaker selling conditions are creating genuine negotiating opportunities.

At the same time, mortgage stress is rising and another rate increase remains a possibility rather than something buyers can safely ignore.

The practical approach is therefore not to predict the bottom.

It is to identify a property with strong fundamentals, establish its value from real comparable sales, negotiate according to current local conditions and set a purchase ceiling that still works if finance becomes more expensive.

That is where buyer advocacy becomes most useful in a market like this: not predicting what the RBA will do next, but helping buyers determine what the property is actually worth, what leverage they have today, and where their walk-away price should be before bidding begins.

Forge Real Estate Melbourne can help you blueprint your future by finding the perfect blue-chip property where your lifestyle needs and investment goals converge.

📞 Phone: (03) 91003633

✉️ Email: info@forgeproperty.com.au

🌐 Website: www.forgerealestate.com.au

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